Pretax profit climbed to 345 million pounds ($522 million)
in 2012, from 299 million pounds a year earlier, the Cardiff,
Wales-based insurer said today in a statement. That beat the
331.7 million-pound average estimate of 18 analysts surveyed by
Bloomberg.

“U.K. car insurance business is the main driver of our
improved results this year,” Finance Director Kevin Chidwick
said on a call with reporters. “We’ve seen claims levels
reverting to normalized levels after a bumpy 2011.”

Admiral, which insures 3.6 million vehicles mainly in the
U.K., is slowing its growth in its home market as prices fall
after reaching an all-time high in 2012. Admiral, which has more
than quadrupled in value since its initial public offering in
2004, has grown profitably by undercutting competitors in a
period of rising prices.

Admiral rose as much as 6.6 percent to 1,350 pence in
London and traded at 1,333 pence at 9:02 a.m. local time,
valuing the company at 3.6 billion pounds.

Admiral’s net income rose 17 percent to 258.4 million
pounds in 2012, the firm said in the statement. The insurer
increased its dividend to 90.6 pence a share, beating the
analysts’ estimate of 85.8 pence.

“Our first look through the full year results suggests
that we were wrong in mainly one area: profit commission,” she
said in a note to clients today. The firm reported profit
commission, which Admiral earns on some reinsurance contracts,
rose 75 percent to 108.4 million pounds. That contributed more
than 30 percent to pretax profit, Ferneyhough estimated.